EARNINGS PER SHARE

Basic earnings per share is computed by dividing net income by the weighted average number of shares outstanding during the applicable period, excluding outstanding participating securities. Diluted earnings per share is computed using the weighted average number of shares determined for the basic computation plus the dilutive effect of potential common shares issuable under certain stock compensation plans. For the three and nine months ended September 30, 2018 and 2017, there were no outstanding stock options to include in the diluted earnings per share calculations.

Unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and are included in the computation of earnings per share pursuant to the two-class method. The Corporation has determined that its outstanding unvested stock awards are participating securities.

The computation of basic and diluted earnings per share is shown below:



	Three months ended September 30,						Nine months ended September 30,
	2018			2017			2018			2017
Basic earnings per common share computation:
Net income per consolidated statements of income	$	9,236		$	7,246		$	24,774		$	20,409
Net earnings allocated to participating securities	(40		)	(40		)	(113		)	(120		)
Net earnings allocated to common stock	$	9,196		$	7,206		$	24,661		$	20,289
Distributed earnings allocated to common stock	$	2,586		$	2,506		$	7,607		$	7,521
Undistributed earnings allocated to common stock	6,610			4,700			17,054			12,768
Net earnings allocated to common stock	$	9,196		$	7,206		$	24,661		$	20,289
Weighted average common shares outstanding, including shares considered participating securities	15,285			15,285			15,281			15,188
Less: Average participating securities	(60		)	(78		)	(67		)	(84		)
Weighted average shares	15,225			15,207			15,214			15,104
Basic earnings per common share	$	0.60		$	0.47		$	1.62		$	1.34
Diluted earnings per common share computation:
Net earnings allocated to common stock	$	9,196		$	7,206		$	24,661		$	20,289
Weighted average shares and dilutive potential common shares	15,225			15,207			15,214			15,104
Diluted earnings per common share	$	0.60		$	0.47		$	1.62		$	1.34